The Commissioner Of Income Tax-Iii, Ludhiana v. M/S Malwa Cotton Spinning Mills Ltd., Ludhiana

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No. 396 of 2007DATE OF DECISION : 25.07.2008 The Commissioner of Income Tax-III, Ludhiana .... APPELLANT Versus M/s Malwa Cotton Spinning Mills Ltd., Ludhiana ..... RESPONDENT CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTALHON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present:Mr. Rajesh Sethi, Advocate,for the appellant-revenue. Mr. Sandeep Goyal, Advocate,for the respondent-assessee. * * * SATISH KUMAR MITTAL , J. ( Oral ) The Revenue has filed this appeal under Section 260 A of theIncome Tax Act, 1961 against the order dated 27.3.2007 passed by theIncome Tax Appellate Tribunal, Chandigarh Bench `A', Chandigarh(hereinafter referred to as `the ITAT') in ITA No. 1120/Chandi/2005 for theAssessment Year 2001-02, in case of the assessee, by raising the followingsubstantial question of law :- “Whether, on the facts and the circumstances of the case, theITAT was correct in deleting of disallowance ofRs.1,32,57,500/- made on account of interest relatable to investment in capital work-in-progress ignoring explanation 8to section 43 (1) of the Income Tax Act, 1961 which requiresthe interest on borrowed capital to be treated as capitalexpenditure?” At the time of issuing of notice of motion, counsel for therevenue stated that the issue involved in this appeal is governed by a FullBench decision of this Court in ITA No. 1 of 2003, titled as “Commissionerof Income Tax-I, Ludhiana Versus M/s. Vardhman Polytex Limited,Chandigarh Road, Ludhiana”, decided on 21.1.2008. Mr. Sandeep Goyal, counsel for the assessee has pointed outthat the aforesaid question has now been considered and decided by theSupreme Court against the revenue in DeputyCommissioner of IncomeTax versus Core Health Care Ltd. (2008) 298 ITR 194 (SC). Counsel forthe revenue does not dispute this legal position. In view of the aforesaid decision of the Supreme Court, wherethe issue has already been settled, in our opinion, now no substantialquestion of law remains to be answered by this Court. Dismissed. ( SATISH KUMAR MITTAL ) JUDGE ( AUGUSTINE GEORGE MASIH ) JUDGE